LABOUR would strike a deal with the SNP to seize power after the next general election, leadership favourite Jeremy Corbyn has said.

The socialist veteran revealed that he would seek a so-called 'confidence and supply' arrangement with fellow anti-austerity politicians north of the border if Labour formed a minority government.

The news comes despite the fact that new research into why Labour lost the election showed that nearly two thirds of voters in England and Wales are against the Scottish Nationalists being part of the UK government.

Labour policy chief Jon Cruddas said the poll was evidence that Labour is fighting for its life – but Corbyn has refused to repeat Ed Miliband's pledge not to do a deal with the SNP.

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Corbyn is by far and away the favourite to win the leadership

The Islington North MP said: "If there isn't a Labour majority but a minority and we've got to work with other parties - probably on the basis of a day-to-day arrangement or… a supply arrangement - then do that."

He added: "Now, obviously you have to work with other parties to get things through, and I would be prepared to do that."

Labour lost 40 seats in its Scottish heartlands at the May election, with the anti-austerity SNP romping home with 56 out of the 59 seats in Scotland.

And although the Scottish wing of the Labour party sees the SNP as its direct competitor, Corbyn's comments are in tune with those of ex-First Minister Alex Salmond, who said the SNP could work with the leadership frontrunner.

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However, the research unveiled by Cruddas paints a grim picture for the left-wing firebrand, whose anti-cuts message has resonated with Labour supporters.

There was only two per cent's difference between Labour voters who backed austerity (32 per cent) and those who didn't (34 per cent), while a mere 16 per cent of voters disagree that cutting the deficit should be the government's top priority.

Corbyn, however, has said that he "could well" be prime minister.

Although the unlikely sex symbol's straight-talking brand of old Labour politics is proving popular with the trade unions and party grassroots, senior figures from the Blair and Brown years have slammed him as unelectable.

A spokesperson for leadership rival Liz Kendall said: "It's astonishing that Jeremy Corbyn has undermined the new Scottish Labour leadership a week before they've even been announced.

"Labour Party members in Scotland will be shocked to see Jeremy playing footsie with the SNP rather than focusing on rebuilding our party."

Neither of the Scottish Labour leadersh" Neither of the Scottish Labour leader-hopefuls, Kezia Dugdale and Ken Macintosh, has endorsed a candidate in the UK election contest.

But Ms Dugdale was attacked by Nationalists earlier this week when she warned electing Mr Corbyn would leave the party "carping from the sidelines".

Former SNP leader Alex Salmond has said he could work with Labour on "a range of issues", such as welfare reform and abolishing Trident, if Mr Corbyn became leader.

Welcoming the Islington North MP's remarks, an SNP spokesman said: "It is becoming increasingly clear that people in Scotland and across the rest of the UK want an alternative to the austerity-driven ideology of the Tories."